This is a Phase III, randomized, double-blind study of nevirapine administered to pregnant HIV-1 infected women during labor, and to their neonates between 48 and 72 hours of age. The primary endpoint is the incidence of HIV-1 transmission from mother to infant. The study will include careful toxicity monitoring through clinical evaluations and laboratory monitoring. Mothers will be randomized at any time after their 32nd week of gestation to receive either a single 200 mg oral dose of nevirapine in active labor or the corresponding placebo. Mothers will be encouraged to follow the regimen of ZDV outlined in the ZDV treatment guidelines for both themselves and their infants. Mothers will be followed on-study for 4 to 6 weeks post-partum. Infants will receive a single 2 mg/kg oral dose of nevirapine (or the corresponding placebo) administered between 48 and 72 hours of life. The infant's study drug will be the same as the mother's randomized treatment assignment. Infants will be dosed with study drug according to their randomization group regardless of whether the mother received study drug. Infants will be followed for six months of life, and will be tested for HIV at 4 to 6 weeks of life, three months of life, and six months of life.